TaxTMI 
TaxTMI 
2010 (8) TMI 312
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....for such goods had been prescribed @ 16% ad velorem as basic excise duty plus 8% as additional excise duty. The appellants however, were paying duty at the concessional rate claiming the benefit under Notification No. 14/2002-C.E. dated 1-3-2002. The said notification prescribed the concessional rate of duty for such goods subject to compliance of specified conditions. In terms of Sl. No. 16 of the table to the said notification read with the proviso (a) thereof, such goods were chargeable to concessional rate of 8% basic excise duty plus 4% additional excise duty totaling to 12% ad velorem duty, subject to condition that the goods were made from textile fabrics on which appropriate duty of excise had been paid. However, the raw materials out of which the said goods were manufactured by the appellants were exempt from payment of duty of excise and no duty was therefore paid on inputs by their manufacturer. As the condition of payment of appropriate duty on the inputs was not fulfilled, the appellants were not entitled to avail the benefit under the said notification, more particularly in view of the decision of the Apex Court in the matter of CCE v. Dhiren Chemical Industries repor....
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.... engaged in the process of manufacture of yarn from fibres, which is essential function to constitute a composite mill. According to learned DR the case is fully covered by the decision of the Tribunal in Auro Textile v. Commissioner of C. Ex. Chandigarh reported in 2010 (253) E.L.T. 35 (Tri. Del.). He further submitted that the decision of the Delhi High Court is in respect of Cenvat credit and, therefore, is not applicable to the facts of the case in the matter in hand. Attention was also drawn to the decision of the Apex Court in the matter of Collector of Central, Bombay v. Kohinoor Mills reported in 1995 (77) E.L.T. 42 (S.C.). 6. As far as merits of the case is concerned, the impugned orders are sought to be assailed only on ground that the authorities below failed to consider the defence of the appellants that theirs is a composite mill and, therefore, they are entitled for the benefit of the Notification No. 14/2002, dated 1-3-2002 and more particularly in view of the explanation VII(2) to the said notification. In other words, it is the case of the appellants that the appellants being a composite mill, they are entitled for the exemption benefit under the said notifi....
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.... appellants to confine to the grounds of challenge disclosed in the memo of appeal. Apart from those grounds, the appellants can raise new grounds subject however to the leave in that regard being obtained from the Tribunal. In the case in hand, the appellants have not obtained any such leave. Even the learned Advocate for the appellants has not disclosed any reason for not raising the ground at any earlier point of time. 11. The question as to whether it is a composite mill or not is not a pure question of law. There has to be facts on record to decide such issue. Apart from the facts to decide such issue, it is also necessary for the party raising such point to raise the same at the earliest available opportunity, so that the opposite party gets ample opportunity to meet the said point by placing necessary facts to counter the said contention of the claimant. Basic principles of natural justice also require the party raising a point based on facts, to plead such facts at the earliest opportunity and give fair opportunity to other side to meet the case. Admittedly, no such plea was raised either in the reply to the show cause notice, nor during the course of pendency of the....
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....being in force or the additional duty of customs leviable under Section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid. As far as the case of the appellants is concerned, it is governed by Sl. No. 16 in the table to the said notification which reads thus :- Sl. No. Chapter or heading No. or sub-heading No. Description Rate of duty Condition (1) (2) (3) (4) (5) 16 6001.12, 6001.22 6001.92, 6002.10 6002.20, 6002.30 6002.43 or 6002.93 Knitted or crocheted fabrics, other than of cotton, subjected to any process 16% 5 15. If we peruse circular dated 10-12-2002, the explanation regarding the term composite mill is nothing but reproduction of its definition in explanation VII(2) of the said notification. Similar is the case in relation to Notification No. 6/2002-C.E. (N.T.), dated 1-3-2002. Therein, the composite mill has been defined to mean a manufacturer who is engaged in processing of fabrics with the aid of power alongwith the spinning of yarn from fibres and weaving or knitting or crocheting of fabrics within the same factory and includes multi locational composite mill, i.e. public limited company which is engaged in the processing of fab....
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....For the reasons stated above, the appellants claim about composite mill is totally devoid of substance. 19. The Delhi High Court, in M.B. Dyers case, referring to Notification No. 6/2002 held that "A plain reading of the said notification shows that a distinction has been drawn out between the composite mills and other than composite mills. Explanation 2 to Clause (6) of the notification makes it clear as to what is meant by a composite mill. It means a manufacturer who is engaged in the processing of fabrics with the aid of power alongwith the spinning of yarn from fibres and weaving or knitting or crocheting of fabrics within the same factory etc. The respondent, as already mentioned above, is not a composite mill. It manufactures its final product-processed fabrics not by spinning of the yarn from fabrics but from grey fabric purchased from the market. Explanation 3 is also relevant inasmuch as it clarifies that the provisions of the notification would not apply where the processed fabric itself is used as an input for further processing. The consequence of this explanation and clarification is that if there is any processed fabric and the same is further processed into t....